This decision, handed down on 29 October 2021, illustrates how a consideration of the principles previously laid down by the Court of Appeal may in some, albeit unusual, circumstances, result in the UK Patents Court declining to follow the default position and grant a stay of UK infringement proceeding pending a validity decision from the European Patent Office.
In this case, the court considered an application by Mylan UK Healthcare Limited (“Mylan”) for a stay of infringement proceedings brought by Neurim Pharmaceuticals (1991) Limited (“Neurim”) in the UK Patents Court for infringement of its patent EP(UK) 3,103,443 (the “Patent”) relating to a “Method for treating primary insomnia”. The stay was sought pending the outcome of opposition proceedings brought by Mylan at the European Patent Office (“EPO”). The trial of the infringement action was scheduled for December 2021.
This case is a checkpoint in a complex, ongoing battle between Neurim and Mylan over the patent family in which the Patent in issue is comprised. Mylan had previously prevailed in a conflict over the parent patent when a UK Patents Court judgment in favour of Neurim was, within days, rendered a nullity by the revocation of the patent at the EPO. (The consequential judgement of the UK Patents Court is discussed here). The Patent in issue in the current case is a divisional from the revoked parent patent.
The overall situation was made more complicated by a third party pharmaceutical company, Teva, having also entered the market with a drug which potentially infringed the Patent.
Mylan’s arguments in favour of a stay included the fact that, according to Mylan, the Patent was likely to be held invalid. However, even if the Patent was held to be valid and infringed, an award of damages to Neurim would be an appropriate remedy. Certainly, a stay would deprive Neurim of the opportunity to remove Mylan from the market before the Patent expired (which it would do shortly) but this consideration was counter-balanced by the fact that, even without Mylan’s presence on the market, Neurim would not have exclusivity in the product in light of Teva’s generic product.
On the other hand, the failure to grant a stay would risk Mylan suffering unquantifiable damage and irrecoverable loss as a result of having to pay damages, as well as wasted costs. Furthermore, if Mylan were injuncted, Teva would be well-placed to pick up Mylan’s position as the generic supplier of the product and Mylan would lose its first-mover advantage. Finally, the upcoming UK trial related to novel points of law about issue estoppel and would not determine infringement or validity. It would not, therefore, give commercial certainty to Neurim or anyone else.
Conversely, Neurim argued that the issues surrounding the validity of the parent patent were complicated and pointed out that the EPO had granted the Patent despite objections from Mylan. Neurim also submitted that, if successful on the preliminary issue before the UK court, Neurim would be able to restore its monopoly as against Mylan and would pursue Teva. Finally, a decision of the UK court in December would increase commercial certainty because it would put in place further pieces of the legal jigsaw to give a determination of their rights.
Ian Karet (sitting as Deputy High Court Judge) noted that, in determining whether or not a stay of UK patent proceedings should be granted during an EPO opposition, the court must follow the law as set out by the Court of Appeal in IPCom GmbH v HTC Europe. He, therefore, considered the factors laid down by that Court including, most importantly, that the court should exercise its discretion to achieve the balance of justice between the parties but that, in the absence of other relevant factors, the default option should be a stay of the national proceedings pending the EPO decision.
In this case, the court concluded that there were certain factors pointing against the default option of granting a stay of the UK proceedings.
Firstly, it was clear that, if a stay were granted, there was no prospect of Neurim obtaining a final injunction against Mylan before the Patent expired since no decision would issue from the EPO until 2024 at the very earliest and possibly not until 2027. There would, as a result, be the possibility of generic competition having a significant impact on Neurim at the end of the Patent’s life. This was a balance of justice point in favour of Neurim.
Secondly, the Court of Appeal in IPCom had stated that a judge in the Patents Court was entitled to refuse a stay where there was evidence that some commercial certainty would be achieved at a considerably earlier date in the UK proceedings than in the EPO. Memorably, the Court of Appeal said that “some certainty, sooner rather than later, and somewhere, such as in the UK, rather than nowhere, is, in general, preferable to continuing uncertainty everywhere”. The court considered that this was the position in this case since a decision on the preliminary issues in the UK proceedings would give the parties at least some more commercial certainty within a relatively short time and during the life of the Patent.
Finally and importantly, Neurim had belatedly offered Mylan an undertaking to repay any damages or profits that Mylan was ordered to pay in respect of infringement if the Patent was ultimately revoked. According to the Court of Appeal in IpCom, this constituted potential mitigation against a “weighty factor” in favour of the grant of a stay.
In conclusion, the court considered that, in this “most unusual case”, a stay should not be granted.